Fines on imported carmakers

Toughen penalties for emission cheating through law revision

The Ministry of Environment announced last week that it would take criminal action against three imported carmakers, accusing them of manipulating emissions data on their diesel vehicles. The ministry said 37,154 Mercedes-Benz vehicles sold between 2012 and 2018 emitted more than 13 times the legal limit of nitrogen oxides. Nissan also sold 2,293 illegal diesel Qashqai vehicles and Porsche sold 934 Macan S diesel cars.

The ministry plans to cancel emission-related certification for the models this month and impose a fine of 77.6 billion won ($63 million) on Mercedes-Benz, 1 billion won on Porsche and 900 million won on Nissan. The penalty marked Mercedes-Benz Korea's first-ever and the industry's largest fine for “mishandling” emissions figures.

The environment ministry accused the three carmakers of installing illegal software that affected exhaust gas recirculation (EGR) and selective catalytic reduction (SCR) systems, thereby increasing nitrogen oxide levels. The software enabled the vehicles to detect when they were being tested in a lab and lower the output of toxic air pollutants to levels far below those released on the road.

The environment ministry's announcement shows that imported carmakers have been manipulating emissions across the board ― Audi Volkswagen Korea was fined 14.1 billion won in 2015 for fabricating emissions test results for 125,000 diesel cars sold in South Korea.

Manipulating emissions is an obviously illegal act intended to defraud consumers while simultaneously flagrant laughing in the face of environmental regulations. The ceiling on fines related to illegal emissions was raised to 50 billion won in December 2017, but that is not enough. It may be necessary to introduce punitive damages to penalize carmakers that perpetrate illegal acts intentionally and maliciously.

In September last year, three former and incumbent BMW Korea executives were sentenced to six to eight months in jail, suspended for one year, for forging emission test results from 2011 to 2015.